Panama Papers: Iceland PM refuses to resign over investments

Iceland's prime minister has refused to resign after being accused of hiding millions of dollars in investments behind a secretive offshore company.

Leaked documents show that Sigmundur Gunnlaugsson and his wife bought offshore company Wintris in 2007.

He did not declare an interest in the company when entering parliament in 2009. He sold his 50% of Wintris to his wife for $1 (70p), eight months later.

Opposition parties say they plan to hold a confidence vote in parliament.

Mr Gunnlaugsson says no rules were broken and his wife did not benefit financially.

The offshore company was used to invest millions of dollars of inherited money, according to a document signed by Mr Gunnlaugsson's wife, Anna Sigurlaug Palsdottir, in 2015.

Panama Papers - tax havens of the rich and powerful exposed

• Eleven million documents held by the Panama-based law firm Mossack Fonseca have been passed to German newspaper Sueddeutsche Zeitung, which then shared them with the International Consortium of Investigative Journalists. BBC Panorama is among 107 media organisations - including UK newspaper the Guardian - in 76 countries which have been analysing the documents. The BBC doesn't know the identity of the source

• They show how the company has helped clients launder money, dodge sanctions and evade tax

• Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrong-doing

• Tricks of the trade: How assets are hidden and taxes evaded

• Panama Papers: Full coverage; follow reaction on Twitter using #PanamaPapers; in the BBC News app, follow the tag "Panama Papers"

• Watch Panorama on the BBC iPlayer (UK viewers only)

The leaked documents, published on Sunday, show that Mr Gunnlaugsson was granted a general power of attorney over Wintris - which gave him the power to manage the company "without any limitation". Ms Palsdottir had a similar power of attorney.

Court records show that Wintris had significant investments in the bonds of three major Icelandic banks that collapsed during the financial crisis which began in 2008. Wintris is listed as a creditor with millions of dollars in claims in the banks' bankruptcies.

Mr Gunnlaugsson became prime minister in 2013 and has been involved in negotiations about the banks which could affect the value of the bonds held by Wintris.

He resisted pressure from foreign creditors - including many UK customers - to repay their deposits in full. Had foreign investors been repaid, it might have adversely affected both the Icelandic banks and the value of the bonds held by Wintris.

But Mr Gunnlaugsson kept his wife's interest in the outcome a secret.

'Lost all trust'

On Monday, Icelandic opposition parties called on Mr Gunnlaugsson to resign over the alleged conflict of interest and said they planned to table a confidence motion in parliament.

"What would be the most natural and the right thing to do is that [he] resign as prime minister," Birgitta Jonsdottir, the head of the Pirate Party, told the Reuters news agency. "There is a great and strong demand for that in society and he has totally lost all his trust and believability."

Former Prime Minister Johanna Sigurdardottir, who oversaw Iceland's recovery from the financial crisis, meanwhile wrote on Facebook: "The prime minister should immediately resign."

An online petition demanding Mr Gunnlaugsson's resignation also had some 24,000 signatures - more than 7% of the island nation's population.

But in an interview with Channel 2 television, the prime minister insisted he had put the interests of the Icelandic people ahead of the interests of the failed banks' claimants.

"I have not considered quitting because of this matter nor am I going to quit because of this matter," he said.

"The government has had good results. Progress has been strong and it is important that the government can finish their work."

A spokesman for the prime minister earlier said that Ms Palsdottir had always declared the assets to the tax authorities and that, under parliamentary rules, Mr Gunnlaugsson did not have to declare an interest in Wintris.

He said that joint share certificates in Wintris had been issued because the prime minister and his wife had a joint bank account. This was pointed out to them when the documents were reviewed in 2009.